The value of saving money is often preached but not largely practiced. According to National Financial Educators Council, “most young adults receive no financial education before they enter the work force.” Currently, 39% of American adults have ZERO, non-retirement savings. This implies that in the event of job loss, or emergency they will not have adequate savings to sustain themselves and might have to rely on 401k or IRA money which will cost them in penalties and taxes.
College debt is mounting...
The Millennial population today is reeling with more college debt than past years. According to www.youth.gov, the average debt of students when they graduated from college rose from $18,550 (in 2004) to $28,950 (in 2014), an increase of 56 percent. This leads to the question, as parents and guardians, what can you do to educate your child about the importance of savings? Well, start with a youth savings account for them and teach them to be smart about their money.
Youth accounts can prevent college debt...
You can open a savings account for your child, even before they start pre-school. Start with a small sum to keep the account functional. You can deposit monthly, biannually or annually. Every financial institution has different requirements for keeping a savings account active so make sure you are well aware of the requirements so that you do not incur fees or get reported for unclaimed funds.
Initially, you will be depositing the money for your child, but as your child gets older and begins to understand the concept of savings, you can teach them about depositing money by helping them save money they get for birthdays, other occasions or other earnings. Depositing a part of their pocket money is also a good idea. When they get their first income, you can then open a checking account for them, where they can deposit their paychecks and withdraw money as needed using an ATM card. Plus, they will also learn to pay bills through online banking and deposit checks using mobile apps.
Requirements for a youth account...
Financial institutions usually require that parents or custodians be co-signers on accounts opened for minors. However, they can be removed only on request once the child turns 18. Being the co-signer on the youth account, gives you access to monitor activities on your child’s account. At Century Federal, parents or custodians can be the co-signers on a youth savings account, however this isn’t a requirement.
Century Federal provides a youth savings accounts which can be opened for as low as $5 deposit. Plus, high school students preparing for college who have been Century Federal members for a year can apply for Century Federal’s Guy H. Thorpe Memorial Scholarship to help them pay for college fees. Learn More about Century Federal’s Youth Accounts.